BILL ANALYSIS Ó
SB 1128
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Date of Hearing: June 20, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
1128 (Glazer) - As Introduced February 17, 2016
SENATE VOTE: 37-0
SUBJECT: Commute benefit policies
SUMMARY: Removes the sunset for the Metropolitan Transportation
Commission (MTC) and the Bay Area Air Quality Management
District (BAAQMD)-administered San Francisco Bay Area commuter
benefits program that requires certain employers to provide
commuter benefit options to their employees. Specifically, this
bill:
1)Authorizes MTC and BAAQMD to continue their commute benefits
program on a permanent basis by deleting the sunset date of
January 1, 2017.
2)Deletes bicycle commuting from the pre-tax option of the
program to conform to federal law, and adds bicycle commuting
to the employer-paid benefit option of the program allowing an
employer to offer a bicycle commuting subsidy to employees.
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3)Deletes the requirement that MTC and BAAQMD issue a report to
the Legislature.
EXISTING LAW:
1)Establishes BAAQMD with the primary responsibility for
controlling stationary sources of air pollution within the
nine counties that surround San Francisco Bay, including
Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo,
Santa Clara, southwestern Solano, and southern Sonoma
counties.
2)Establishes MTC, which serves as the Metropolitan Planning
Organization (MPO) and the regional transportation planning
agency for the San Francisco Bay Area. MTC is responsible for
transportation planning, coordinating, and allocating funds
from certain state and federal highway and transit programs.
3)Allows MTC and the BAAQMD, until January 1, 2017, to jointly
adopt a commute benefit ordinance that requires covered
employers, as defined, to offer one of the following options
to their covered employees, as defined:
a) A pretax option consistent with federal law allowing
covered employees to exclude from taxable wages employee
transit pass, vanpool, or bicycle commuting costs;
b) An employer-paid benefit whereby the covered employer
offers a subsidy to offset the transit or vanpool commuting
costs;
c) Transportation furnished by the covered employer at no
or low cost to the covered employee in a vanpool, bus, or
multi-passenger vehicle operated by or for the employer;
and,
d) An alternative program approved by MTC and BAAQMD that
provides similar the same benefits as the other options.
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1)Requires that the commute benefit ordinance allow covered
employers at least six months to comply after adoption of the
ordinance.
2)Establishes the role of transportation management associations
in the place of covered employers in complying with the
ordinance.
3)Requires the commute benefit ordinance to specify how the
implementing agencies will inform covered employers how
compliance will be demonstrated, the procedures for proposing
and criteria used to evaluate an alternative commuter benefit,
and any consequences for non-compliance.
4)Requires MTC or the BAAQMD, on or before July 1, 2016, if they
implement a commute benefit ordinance, to jointly submit a
report to the transportation policy committees of the
Legislature on the effectiveness of the ordinance and sets
requirements for that report.
5)Prohibits the use of MTC's federal planning funds to be used
for the implementation and enforcement of the benefit commute
ordinance.
6)Defines "covered employer" to mean any employer for which an
average of 50 or more employees perform work for compensation
on a full-time basis within the area where a commute benefit
ordinance is adopted.
7)Defines "covered employee" to mean an employee who performed
at least an average of 20 hours of work per week within the
previous calendar month within the area where the ordinance is
adopted.
8)Enacts the Global Warming Act of 2006 [AB 32 (Núñez), Chapter
488, Statutes of 2006] that requires the California Air
Resources Board (ARB) to adopt a statewide greenhouse gas
(GHG) emissions limit equivalent to the statewide greenhouse
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gas emissions levels in 1990 to be achieved by 2020.
9)Enacts SB 375 (Steinberg), Chapter 728, Statutes of 2008, that
requires the ARB to provide each region of the state with GHG
emission reduction targets for the automobile and light truck
sector. Requires a Regional Transportation Plan (RTP) to
include a Sustainable Communities Strategies (SCS) as part of
the regional transportation plan to achieve the targets for
GHG reduction.
FISCAL EFFECT: This bill is keyed non-fiscal by the Legislative
Counsel.
COMMENTS: In 2009, three Bay Area cities, San Francisco,
Berkeley, and Richmond, adopted local ordinances requiring
employers to offer their employees commuter benefits consistent
with federal commuter tax benefits, such as allowing employees
to pay their transit or vanpool fare using pre-tax dollars.
Based on the success of these programs, in 2012 MTC and BAAQMD
sought authorization from the Legislature to adopt an ordinance
that would apply to all counties in the region. SB 1339 (Yee),
Chapter 871, Statutes of 2012, authorized the two agencies to
develop a pilot ordinance with a January 1, 2017, sunset date.
SB 1128 would delete this sunset date, thereby extending the
authorization for the program permanently.
According to the author, the goal of the commute benefit program
is to promote the use of transit and other alternative commute
modes in order to reduce single-occupant vehicle commute trips,
traffic congestion, and GHG emissions and other air pollutants
from motor vehicles. The program seeks to achieve these
objectives by expanding the number of employers who provide
commuter benefits to their employees.
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In a recent report to the Legislature assessing the pilot, MTC
and BAAQMD address the implementation of the program, costs
savings to employers and employees, and overall reductions in
commuter car trips and GHGs.
Implementation: To implement the program, the agencies did
extensive outreach to business groups to work with employers to
determine the right option for their employees. A total of
3,910 employers in the Bay Area are registered and participating
in the program, with 55% offering a commuter benefit to their
employees for the first time. This translates to roughly
472,000 employees who are eligible for a commuter benefit, of
which 205,000 are utilizing it. Additionally, of those
employees using the program, 44,400 would not travel by an
alternative mode of transportation if their employer did not
provide a commuter benefit. However, the report estimates that
the program may apply to as many as 10,000 Bay Area employers.
Although under current law, BAAQMD has the authority to enact
penalties for non-compliance, MTC and BAAQMD plan to continue to
emphasize compliance assistance over enforcement by publicizing
and conducting outreach activities to increase participation.
Savings: The pilot program offers employers four options of
commuter benefit for their employees. The pre-tax option, which
allows employees to exclude their transit or vanpool expenses
from taxable income for up to $255 per month, was the most
widely implemented with 82% of employers offering this option.
The option is easy to administer and also saves money for the
employer and the employee. Specifically, an employer could
reduce their payroll taxes by as much as $238 per employee per
year. Employees in the 25% federal income tax bracket and the
6.5% state income tax bracket can save up to $965 per year.
Environmental benefits: With the passage of SB 375 (Steinberg),
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Chapter 728, Statutes of 2008, the state's MPOs are required to
develop SCSs to reduce GHGs by a certain amount determined by
the ARB. Adopting innovative strategies to increase mode shift
is paramount to meeting the targets. In the first year of the
program 4.3 million fewer vehicle trips were made as a result of
the benefit, reducing vehicle miles traveled by 86 million
miles. This translates to a reduction of nearly 36,000 tons of
GHGs or 2.7% of the Bay Area's GHG reduction target.
In writing in support of SB 1128, the California Transit
Association noted that "this bill will benefit employers and the
employees through lower payroll and income taxes, and reduced
tailpipe emissions and traffic congestion. Moreover, in light
of ongoing issues related to aging and deficient transportation
infrastructure and increasing costs of living in the Bay Area,
this bill is a small step the Legislature can take to lower the
cost of commuting and advance California's climate protection
goals, all without raising taxes or otherwise harming economic
growth."
Previous legislation: SB 1339 (Yee) Chapter 871, Statutes of
2012, authorized a pilot program for MTC and BAAQMD to establish
ordinance requiring certain Bay Area employers to offer commute
benefits to employees.
REGISTERED SUPPORT / OPPOSITION:
Support
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Bay Area Air Quality Management District (Sponsor)
Metropolitan Transportation Commission (Sponsor)
Alameda-Contra Costa Transit District
Alameda County Transportation Commission
California Association for Coordinated Transportation
California Transit Association
City and County of San Francisco
Coalition for Clean Air
Golden Gate Bridge, Highway, and Transportation District
Lyft
Napa Valley Transportation Authority
National Resources Defense Council
Peninsula Corridor Joint Powers Authority
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Regional Asthma Management and Prevention
San Francisco Bay Area Rapid Transit District
San Francisco Chamber of Commerce
San Francisco Municipal Transportation Agency
San Mateo County Transportation Authority
San Mateo County Transit District
Santa Clara County Board of Supervisors
Solano Transportation Authority
SPUR
Opposition
None on file
Analysis Prepared by:Melissa White / TRANS. / (916)
319-2093
SB 1128
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